Polluting Nations Should Act Now to Improve Environment, Says World Bank Official

The world’s environmental and economic health is at risk unless key nations change how they consume resources now, said Charles Di Leva, chief counsel of the World Bank’s Environmentally and Socially Sustainable Development and International Law Practice Group. Di Leva spoke March 30 at the Virginia Environmental Law Journal’s 25th anniversary conference, “Interdisciplinary Directions in Environmental Law,” which drew more than 250 participants to discuss the future of environmental advocacy last week.

“Despite what appears to us as overwhelming evidence of climate change, influential actors continue to doubt whether climate change is real,” said Di Leva. “Even where we do have consensus, we often have moral conflict over how to proceed.”

Di Leva reviewed the last century’s damage on the environment: Americans, with one-twentieth of the global population, have contributed a quarter of the global greenhouse gas emissions. Economic and population growth (9.2 billion by 2050) will increasingly tax water and food supplies, while a lack of developed resources in poorer countries has already led one billion to suffer from hunger and 5 million to die each year from water-borne diseases.

“The impacts of climate change are falling disproportionately on the poor,” Di Leva said, pointing to mudslides in Guatemala and Hurricane Katrina’s impact on New Orleans. Poor countries consume only 5 percent of modern energy services consumed by wealthy countries and nearly 1.6 billion people do not have access to electricity. The International Energy Agency estimates the world will need $300 billion per day through 2030 to give electricity to all who need it, and 60 percent more energy.

“Unfortunately…It’s fossil fuels that will serve those needs,” he said, and developing countries like India and China have vast coal reserves.

China and India in particular are catching up rapidly with Western energy consumption levels. China has 300 large hydrofacilities planned for construction, car sales there rose 82 percent in the first half of 2003 alone, and its demand for oil is expected to double in 20 years. Economic growth is pressuring China to bypass potential solutions to cleaning up coal-fired power plants.

“[World] emissions are estimated to be a factor of 1.5 to 3 times their present levels by 2050,” Di Leva said. “Many agree, with all of these statistics, that the objectives of environmental concerns and economic growth are on a collision course.”

And the human population isn’t the only one affected by the profound changes wreaked on the environment, Di Leva pointed out. Of the 40,000 endangered species assessed by the World Conservation Union, 12,000 face some form of extinction risk, including one of eight bird species, 13 percent of the world’s flowering plants, and a quarter of all mammals, with top offenders being the United States, Australia, and Indonesia. An estimated 52 percent of global fish docks are “fully exploited” and 20 percent more are depleted or recovering from depletion. Species worldwide face challenges from development, foreign invading species, and climate change.

“One of the great challenges is to entice the United States and Australia back into Kyoto Protocol or something similar,” he said, “and to do so in a way that includes incentives for China, India, and Brazil to also stabilize and reduce their emissions, because even at the current 550 parts per million of CO2 in the atmosphere, our mean temperatures are going to increase by 3 degrees Celsius.”

China already has begun to recognize its effect on the environment, and is developing new technologies like high-speed trains in conjunction with European firms.

Multinational institutions like the World Bank should accept that private capital is increasingly dominating decisions affecting the environment, especially in emerging markets, Di Leva argued. The governments of developing countries with adequate resources may no longer be willing to comply with conditions such institutions have set forth.

“We need to be careful not to give into the temptation to go away from environmental and social measures that have helped these institutions become better stewards,” Di Leva said. Critics have used the current era of change to advocate against such safeguards, “but I think this is wrong in the face of historical research.

“Trading regimes are also under challenge from environmental and labor groups,” he said. “While global trading measures may have helped fuel large-scale growth, many remain convinced that the benefits-sharing supported by the [World Trade Organization] measures has been inequitable, has been built to support the lowest cost of production, not the highest degree of environmental and social protection.”

Di Leva reminded the audience that the World Bank only lends $20 billion per year—a drop in the bucket in comparison to private funding. Still, “there are new tools available to solve some of the great challenges we face.”

In Chad, the Bank help set up a transparent oil-revenue-sharing arrangement with local residents, but the government overrode the law when the price of oil doubled. “We’re working to try to resolve this issue,” Di Leva said. “The international community has supported the Bank’s refusal to rescind the law and we believe the project design was sound.”

Other World Bank projects include helping ensure environmental and societal concerns
are considered in a Laos hydro project developed by a French energy company. “We have also developed a new indigenous peoples policy….requiring that we not finance any activity affecting them unless there has been prior informed consultation leading to their broad community support.”

The Bank has begun bundling municipal energy projects and selling them to European and Japanese governments and industries so they can achieve Kyoto Protocol objectives. It has set up a biocarbon fund in 20 countries, in which poor communities receive funds for planting trees and other land management projects that deplete greenhouse gases. The Bank also has sponsored a certification and labeling program for foods produced under certain guidelines.

“International institutions have sought to harmonize their approach toward these policies,” he said. One approach “actually focus[es] on financing the implementation of laws on the ground.” In China, for example, the World Bank worked with local governments to set up a mechanism for rural people displaced by development to own urban property and receive compensation for the land they lived on.

“Perhaps the U.S. reluctance to engage in the current Kyoto system will be solved if we can agree upon a set of technologies that will be applied,” Di Leva suggested. He recalled the Montreal Protocol, in which Americans and the British agreed on reducing substances that deplete the ozone layer. “It succeeded because U.S. and British scientists discovered the technology that could achieve this objective without great economic hardship. The U.S. appears to be hoping today that the same technological breakthrough will occur again.”

The World Coal Institute has developed carbon capture and storage technology that is feasible, but “it’s a question of being able to afford it.”

Di Leva noted other successful environmental efforts, such as the repopulation of fish in the Georges Bank off the coast of the United States and Canada. The area, considered a “lost” zone by the late 1990s, recently experienced a sudden resurgence in species, due in part to satellite image tracking of fishing vessels to protect key areas. “There’s hope that using marine-protected areas on the high seas, even if setting aside 10-20 percent of the world’s oceans, would be enough to ensure full regeneration of the depleted stocks.”

Furthermore, more and more corporations are pursuing an environmentally friendly respectability, from issuing “citizenship reports” to pledging to follow socially responsible development and environmental stewardship guidelines like the Equator Principles. “Equator banks” account for 80 percent of foreign global investment.

“At the time I entered the international scene there were no accountability mechanisms in any of the international financial institutions—none. Today such mechanisms serve as watchdogs to help ensure that our projects comply with environmental and social policies,” he said. “Those mechanisms exist thanks to the advocacy work of lawyers like you that are dedicated to the environmental field.”

Di Leva urged lawyers to bone up on economics in order to craft convincing arguments.

“There is much to be hopeful for, while we must remain concerned.”• Reported by M. Wood